Rpc Inc (RES) SEC Filing 10-Q Quarterly report for the period ending Tuesday, June 30, 2020

Exhibit 99

RPC, Inc. Reports Second Quarter 2020 Financial Results

ATLANTA, July 29, 2020 - RPC, Inc. (NYSE: RES) today announced its unaudited results for the second quarter ended June 30, 2020. RPC provides a broad range of specialized oilfield services and equipment primarily to independent and major oilfield companies engaged in the exploration, production and development of oil and gas properties throughout the United States and in selected international markets.

For the quarter ended June 30, 2020, revenues were $89.3 million, a decrease of 75.1 percent compared with $358.5 million in the second quarter of 2019. Revenues decreased due to lower activity levels and pricing compared to the second quarter of the prior year. Operating loss for the second quarter of 2020 was $37.5 million compared to operating profit of $8.4 million in the same period of the prior year. Adjusted operating loss for the second quarter of 2020 was $35.9 million.¹ Net loss for the second quarter of 2020 was $25.1 million, or $0.12 loss per share, compared to net income of $6.2 million, or $0.03 earnings per share, in the second quarter of 2019. Adjusted net loss for the second quarter of 2020 was $22.3 million, or $0.10 adjusted loss per share.² Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of 2020 was negative $19.4 million, compared to EBITDA of $51.2 million in the same period of the prior year.³ Adjusted EBITDA for the second quarter of 2020 was negative $17.8 million.³

For the six months ended June 30, 2020, revenues decreased to $333.1 million compared to $693.2 million last year. Net loss for the six-month period was $185.5 million, or $0.87 loss per share, compared to net income of $5.4 million, or $0.02 diluted earnings per share in the same period last year.

Cost of revenues during the second quarter of 2020 was $80.0 million, or 89.6 percent of revenues, compared to $265.1 million, or 73.9 percent of revenues, during the second quarter of 2019. Cost of revenues declined primarily due to decreases in expenses consistent with lower activity levels and RPC’s cost reduction initiatives. Cost of revenues as a percentage of revenues increased because of the negative leverage of these expenses over significantly lower revenues. This percentage increase was slightly offset by lower materials and supplies expenses as a percentage of revenues caused by a shift in pressure pumping job mix.

Selling, general and administrative expenses were $28.8 million in the second quarter of 2020 compared to $43.3 million in the second quarter of 2019. These expenses decreased due to lower employment costs, primarily the result of cost reduction initiatives during the previous several quarters. Depreciation and amortization decreased to $19.6 million in the second quarter of 2020 compared to $42.9 million in the second quarter of the prior year. Depreciation and amortization decreased significantly primarily because of the asset impairment charges recorded last quarter which decreased RPC’s depreciable property, plant and equipment.

Discussion of Sequential Quarterly Financial Results

RPC’s revenues for the quarter ended June 30, 2020 decreased by $154.5 million, or 63.4 percent, compared with the prior quarter due to the significant decline in industry activity that began late in the first quarter. Cost of revenues during the second quarter of 2020 decreased by $101.9 million, or 56.0 percent, due to lower materials and supplies and fuel expenses caused by decreased activity, and lower employment costs resulting from headcount and pay reductions. As a percentage of revenues, cost of revenues increased significantly, from 74.6 percent in the first quarter of 2020 to 89.6 percent in the second quarter. RPC’s operating loss for the second quarter of 2020 was $37.5 million, compared with an operating loss of $218.7 million in the first quarter. RPC’s adjusted operating loss for the second quarter of 2020 was $35.9 million, compared with an adjusted operating loss of $13.2 million in the first quarter. ¹ Adjusted EBITDA for the second quarter of 2020 was negative $17.8 million compared to adjusted EBITDA of $25.8 million in the first quarter. ³

¹ Adjusted operating loss is a financial measure which does not conform to GAAP. Additional disclosure regarding this non-GAAP financial measure and its reconciliation to operating loss, the nearest GAAP financial measures, are disclosed in Appendix A to this press release.

² Adjusted net loss and adjusted loss per share are financial measures which do not conform to GAAP. Additional disclosure regarding these non-GAAP financial measures and their reconciliation to net loss and loss per share, the nearest GAAP financial measures, are disclosed in Appendix B to this press release.

³ Adjusted EBITDA and EBITDA are financial measures which do not conform to GAAP. Additional disclosure regarding these non-GAAP financial measures and their reconciliation to net loss, the nearest GAAP financial measures, are disclosed in Appendix C to this press release.